Crimes of Persuasion:

Schemes, scams, frauds.



Investment Scams / Stock Scam Fraud / Boiler Rooms


Demographics

In 1980, the number of Americans who owned securities, either directly or through mutual funds or indirectly through pension funds, was one out of eighteen. By 1999 the number was one in three.

With the wider participation and acceptance of the public in the securities markets, the capacity for harm to the general public has increased.

Now more than ever, the impact of securities fraud extends beyond just the wealthy.

With high individual losses per consumer, generally ranging in the thousands to tens of thousands of dollars, state regulators estimate securities fraud costs Americans nearly $10 billion a year, or about $1 million an hour.

Some fraudulent operations have grossed over $1 million a month from the shattered hopes and financial devastation they inflict.

Expectations

Bull markets on Wall Street make it easier for boiler room crooks to operate. For when the big mutual funds are showing annual returns of 30-40% or more, the idea that you can double your money in a short time, as these con artists promise, doesn't sound so ridiculous.

The danger is compounded by the average investor's desire for maximum return, the concern of retirees worried about outliving their savings, the increase in investment opportunities, and the growing number of individuals across the nation who hold themselves out the public as professional investment advisers .

Products are more sophisticated and your choices have multiplied. You are also encouraged to be more "aggressive" in your investments.

The marketers and sales staff of the most prestigious firms down to the lowlife scammers calling from boilerrooms are singing the same siren song: "You've got to be in the market or you're going to be left behind."

The message is everywhere. It's hard to avoid hearing advertisements for mutual funds or other securities products in virtually every form of media..

Internet Based Trading

Investors are rapidly turning to the Net for both enhanced access to investment information and for the lower costs to execute trades. Nearly 14% of all trades are now conducted on-line.

The demand has caused long delays at some discount brokerages in setting up new accounts. Some brokers can even afford to be selective in their clients, boosting minimum opening account balances.

Fraud is opportunistic, and fraud operators, always among the first to appreciate the potential of a new technology, see the size of the potential market, and the relative ease, low cost, and speed with which a scam can now be perpetrated.

After buying a computer and modem, they can set up and maintain a site on the Web for $30 a month or less, and solicit consumers anywhere on the globe.

A prominent state regulator has aptly noted, "Any con artist not on the net should be sued for malpractice. In my 32 years of investigating fraud, this is by far the greatest money-making machine for scammers that I have ever seen."

Experts In Their Field

People underestimate the ingenuity of people who make their living by fast-talking other people out of their money. Career investment swindlers are very good at their work and know just how to snare even the most reluctant person.

They take great delight in pulling the wool over the eyes of an investor who is 100% confident that he or she could not possibly be hoodwinked.

Many well-educated and intelligent people have fallen for the slick offers of these sophisticated criminals.

Fraudulent sales callers are skilled liars and experts at deceit. Their success depends on it.

Many are coached to say whatever it takes to get your money while they make hundreds of repetitious calls, hour after hour, continually honing their skills.

Such skilled but dishonest salespeople, often with years of experience selling dubious products and services over the phone, pitch opportunities that may sound legitimate, but  are not.

They are extremely good at sounding as though they represent legitimate businesses as they offer various investments or business and employment opportunities. Never assume you'll know a phone scam when you hear one.

Losses to individual investors can be crushing. A 78-year old investor in Arkansas was persuaded by a cold caller to sell his blue-chip portfolio and invest in microcap stocks.

His eventual losses came to more than $440,000.


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In-depth fraud coverage of computer crimes such as pyramid schemes make this economic crime library of internet crimes the cyber crime location for the schemes, scams and swindles that con artists and shonks perpetrate.

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Crimes of Persuasion: Schemes, scams, frauds.

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